Establishment of the Environmental Protocol for Massive Events

On December 7, 2023, the Ministry of Environment and Sustainable Development published Resolution No. 465/2023 (the "Resolution"), that created the Environmental Protocol for Massive Events (the "Protocol"). Organizers of massive events are invited to adhere to such Protocol.

The Protocol is framed in the 2030 Agenda and the Sustainable Development Goals (SDGs), as an additional public policy to achieve observations of the SDGs and to reduce the negative impact that urban life has on the environment, especially in managing mass events. It aims to provide tools that contribute to the reduction of the environmental impact produced before, during and after the development of mass events, through concrete actions and indicators to measure the performance of the environmental management of the event.

Thus, in order to carry out a correct management of environmental impacts in a mass event, it is important to consider all the impacts derived from the procurement of raw materials, production, transportation, and end of life of all the elements used for its realization.

The Protocol identifies the following lines of action for the sustainable management of mass events:

  1. Waste;
  2. Responsible consumption;
  3. Communication and environmental education;
  4. Sustainable mobility;
  5. Energy;
  6. Water; and
  7. Inclusion and Diversity.

Based on these, the Protocol proposes certain qualitative and quantitative indicators to monitor and have metrics that serve to set goals and improvements in the future.

 

For additional information, please contact Nicolás Eliaschev, Pablo Arrascaeta, Milagros Piñeiro, Rocío Valdez and/or Victoria Barrueco.

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News in the hydrocarbons sector: The establishment of the National Program for the Measurement and Reduction of Fugitive Emissions Derived from Hydrocarbon Exploitation and Production Activities

On December 1, 2023, the Secretary of Energy published Resolution 970/2023 (the “Resolution”) that establishes the “National Program for the Measurement and Reduction of Fugitive Emissions Derived from Hydrocarbon Exploitation and Production Activities” (the “Program”).

The Program aims to:

  1. Promote actions for detecting, measuring, quantifying and validating fugitive emissions in hydrocarbon exploration and production activities;
  2. Organize and systematize the information obtained from the measurements made; and
  3. Encourage the implementation of plans for mitigation and reduction of fugitive emissions derived from hydrocarbon activities.

The obligated parties -individuals and/or legal entities- must submit to the Undersecretary of Hydrocarbons of the Nation:

  1. An Annual Fugitive Emissions Measurement Plan; and
  2. A five (5) year Comprehensive Plan referred to the reduction of fugitive emissions, in order to implement specific measures that prioritize the efficiency and use of the gas resource.

The information arising from the above-mentioned plans will be published on the website of the Secretary of Energy.

The regulated entities that have new facilities shall tend to the incorporation of good practices and management actions, appropriate for minimizing fugitive emissions produced from the planning and design stage of such facilities.

It is important to mention that the deadlines for compliance as well as any other aspect related to the implementation of the Resolution shall be subject to the regulation to be issued accordingly.

 

For additional information, please contact Nicolás Eliaschev, Pablo Arrascaeta, Milagros Piñeiro, Rocío Valdez and/or Victoria Barrueco.

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The Secretary of Energy establishes new charges for large consumers

On December 5, 2023, the Secretary of Energy published Resolution 976/2023 (“Resolution 976”), which establishes new charges for the Large Users of the Wholesale Electricity Market (“WEM”) and the Wholesale Electricity Market of Tierra Del Fuego System (“WEMSTDF”), that are supplied by the respective distribution companies.

The most relevant aspects of Resolution 976 are outlined below:

I. Scope and effectiveness

Resolution 976 is applicable to Large Users of the WEM and WEMSTDF that are supplied by the relevant distribution company. Resolution 976 shall come into effect starting on February 2024.

II. Charges included in Resolution 976

  1. Stabilized Charge

The Stabilized Charge will be calculated as the difference between the Average Energy Price of the WEM and the sum of the Power Reference Price (POTREF), the Stabilized Energy Price (PEE) and the Stabilized Transportation Price (PET) established by Resolution 884/2023, applicable to the whole demand characterized as GUDIs, except for public education and health establishments.

  1. Capacity Adjustment Charge

The Capacity Adjustment Charge will be determined based on the difference between the Monthly Reserve Price and the stabilized Power Reference Price (POTREF) and applied to the difference between the maximum and average requirement of Large Users.

III. Undersecretary of Electric Power to adopt complementary measures

The Secretary of Energy empowers the Undersecretary of Electric Power to dictate any complementary regulation that may be required to apply Resolution 976.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Daiana Perrone, Luciana Tapia and/or Victoria Barrueco.

 

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Relevant aspects on the Guidelines for the development of Environmental Impact Reports and Public Participation in Environmental Impact Assessments

On November 30, 2023, the Secretary of Climate Change, Sustainable Development and Innovation of the Ministry of Environment and Sustainable Development released the “Guideline for the development of Environmental Impact Report” (the “EIR Guideline”) and the “Guideline on Public Participation in Environmental Impact Assessment” (the “PP Guideline”), both approved by the Resolution No. 23/2023 (the “Resolution”).

The most relevant aspects are detailed below:

I. Guidelines for the development of Environmental Impact Report

The EIR Guideline is intended to professionals responsible for the development of the Environmental Impact Report (“EIR”) and to the agencies involved in the technical review and environmental licensing of the projects.

It also promotes the integration of the climate change variable in the different phases of the EIR, incorporating information throughout the Environmental Impact Assessment (“EIA”). The inclusion of the climate change variable in the EIA is suggested through two approaches:

  1. Adaptation: evaluates how climate change may influence the project, considering possible climate scenarios and risks that could affect the expected life cycle; and
  2. Mitigation: considers how the project may influence the emission of greenhouse gases ("GHG"), regarding actions by the proponent to avoid or reduce GHG emissions or even increase their absorption through reservoirs or sinks.

II. Guide on Public Participation in Environmental Impact Assessment

The PP Guide seeks to broaden and diversify the mechanisms for public participation in environmental matters. It is mainly intended to the proponents, promoting agencies, professionals responsible for the elaboration of EIR and other offices of the Public Administration involved.

Public participation has different scopes depending on the type of involvement promoted by the evaluating authority or the proponent. Thus, at least four levels of participation can be identified (information, consultation, dialogue, and decision making) that can take place at various points in the project cycle, depending on the size of the project and the strategy defined for stakeholder involvement.

The PP Guide also proposes the qualitative technique of "stakeholder mapping", which makes it possible to identify stakeholders, understand their interests and how each one can affect the viability of the project.

Consultation mechanisms may include multisectoral workshops, virtual consultations, co-creation events, dialogue tables, mediation, or negotiation hearings, direct (door-to-door) visits to communities, participatory management tables, monitoring, and follow-up committees, among others.

The PP Guide proposes the presentation of a disclosure document to optimize access to environmental information and participation in effective decision-making and facilitate the understanding of EIR for the general non-specialized public.

 

For additional information, please contact Nicolás Eliaschev, Pablo Arrascaeta, Daiana Perrone, Milagros Piñeiro, Rocío Valdez and/or Victoria Barrueco.

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Argentina’s National Strategy for the Use of Carbon Markets

On November 14, 2023 the National Ministry of Environment and Sustainable Development published Resolution 385/2023 that approved the “National Strategy for the Use of Carbon Markets” (“ENUMeC” for its Spanish acronym, Estrategia Nacional para el Uso de los Mercados de Carbono).

ENUMeC aims to promote the implementation of carbon markets as one of the carbon pricing mechanisms to contribute to the adaptation and mitigation of climate change in the national territory.

As of today, Argentina does not have a national legal framework to implement the use of carbon markets. In line with this, the ENUMeC establishes 9 key points and 63 actions necessary for the implementation of carbon markets and establishing a framework that encourages and promotes the development of these markets.

The ENUMeC reaches subnational, national and international carbon markets, new and existing carbon markets, as well as regulated and voluntary carbon markets and covers all sectors and greenhouse gases of the National Inventory.

The implementation of ENUMeC is based on the following key points, from which the specific actions are derived:

  1. Climate financing;
  2. Participation in regulated carbon markets under Article 6 of the Paris Agreement;
  3. Promote participation of the private sector in voluntary markets;
  4. Generate Non-Commercial Approaches under the scheme of Article 6.8 of the Paris Agreement;
  5. Assist subnational governments in the implementation of market schemes for their climate change mitigation plans;
  6. Contribute to strengthen and finance climate change;
  7. Develop national and sub-national abilities for the implementation of carbon markets;
  8. Promote environmental integrity in the implementation of carbon markets; and
  9. Guarantee national and regional interests within international negotiations.

ENUMeC is considered a road map for the effective and coordinated implementation of carbon markets in Argentina. Its implementation will require consensus and agreements among national, provincial, public and private actors.

 

For additional information, please contact Nicolás Eliaschev, Daiana Perrone, Rocío Valdez and/or Victoria Barrueco.

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Argentina launches call for expressions of interest for energy storage proposals

The Secretary of Energy has launched a call for expressions of interest for battery energy storage systems (“BESS” and the “BESS EOI”).

The announcement was made by Resolution 906/2023, published on November 8, 2023.

The BESS EOI is framed within the energy transition plans to 2030-2050 recently approved by the Government (for remarks on these documents, click here), which, among other targets, aims to continue developing the renewable power share and promote the installation of new BESS facilities.

With Argentina being a major source of lithium carbonate for lithium-ion batteries, and one of the largest global lithium supplier, BESS EOIs which propose ways to integrate a national supply chain into project delivery will be “valued”.

BESS EOIs shall be submitted no later than 120 days following the enactment of Resolution 906/2023 (i.e., March 7, 2024), and interested parties are being invited to propose projects encompassing the financing, construction and management of BESS facilities in the wholesale electricity market. The projects could be for optimizing generation dispatch, providing power reserve services or other mechanisms proposed.

Moreover, the BESS EOI sets forth that the Secretary of Energy will approve specific regulation addressing pricing of energy and availability, as well as charge and discharge cost hedging, and other ancillary services included in each BESS.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó and/or Rocío Valdez.

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New option to offset penalties imposed by CAMMESA under PPAs through investments in new renewable power generation projects

On November 1st, 2023, the Secretary of Energy enacted Resolution 883/2023 (“Resolution 883”) which establishes the possibility of offsetting penalties imposed by the Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima (“CAMMESA") through investments in new power generation projects from renewable energy sources.

The measure is intended for renewable energy generation projects that entered into Power Purchase Agreements with CAMMESA, including those under the RenovAr Program (Rounds 1, 1.5, 2 and 3), Resolution 202/2016 of the ex- Ministry of Energy and Mining, and Resolution 36/2023 of the Secretary of Energy that implemented the "RenMDI" call for proposals (the "Projects").

Eligible penalties to be offset are related to non-compliance with: (i) Scheduled Commercial Operation Date; (ii) Contracted Energy Supply; and/or (iii) Declared National Component (CND), as well as other penalties that may be reported by CAMMESA to the Secretary of Energy and that could be offset under the scheme approved by Resolution 883.

Projects that have already been notified of penalties will have time until November 30 to adhere to this regime.

Commercial operation date of the new renewable power generation projects shall be accomplished within a 36-month term from the execution of an agreement with CAMMESA, period under which penalties will be suspended.

The price of the energy supplied by the new installed capacity will be established in twenty U.S. dollars per megawatt hour (US$ 20 MWh) and will be remunerated by CAMMESA according to the regime chosen by each Project owner, among the following alternatives: (i) one hundred percent (100%) of the generated energy for a period of sixty (60) months; or (ii) twenty percent (20%) of the generated energy for: (a) a period of one hundred and twenty (120) months, or (b) one hundred and eighty (180) months, having the possibility to use the eighty percent (80%) left for self-consumption or purchases under the Spot market.

If the Project’s owner does not comply with the proposed investment once the established term has expired, an additional interest of ten percent (10%) will be applied on the remaining amount of the penalty accrued at the time the request was issued.

 

For additional information please contact Nicolás Eliaschev, Daiana Perrone, Rocío Valdez and/or Victoria Barrueco.

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Argentine Government releases Hydrogen Guideline

The Argentine Government has released the National Strategy for the Development of the Hydrogen Economy (the “H2 Strategy”). The Strategy was released pursuant to the Energy Transition Plans to 2030 and 2050 (see our remarks on these documents, here), and bills of law currently being analysed in the Congress (see our remarks on these documents, here (available in Spanish)).

The H2 Strategy provides greater detail on the Government planning framework for H2 development and related activities. The key takeaways of the H2 Strategy are:

  • Investment in H2 and associated industries of ≈US$ 90 billion.
  • Deployment of electrolysis facilities aggregating 30 GW and 55 GW of new renewable power generation plants.
  • Total hydrogen production around 5 MT per year, which will be destined to exports (≈3.75 MT) and for domestic use (≈1.25 MT).
  • Creation of 5 new production hubs and construction of new ports.
  • Levelized cost of green H2 ≈1.4 USD/kg.

Further, the H2 Strategy includes measures aiming at positioning Argentina as a global exporter of H2, embedded in a global and regional cooperation agenda, with the end-goal of supplying H2 to markets like Japan and Germany.

In turn, the H2 Strategy proposes actions to foster the local demand for H2, aiming for 100,000 tons per year by 2035, 500,000 tons per year by 2045 and 1 MT by 2050.

Finally, the H2 Strategy considers H2 in relation not only for exports and local use, but also for transport, industrial use, gas networks, electricity systems, and cross-cutting issues such as safety, skills, and environmental impacts.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Luciana Tapia Rattaro, Rocío Valdez and/or Victoria Barrueco.

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Tax break for Renewable Power Generation Projects

The Secretary of Energy has enacted Resolution 714/2023 (the “Resolution 714”), dated September 1, 2023, that foresees a tax break for Renewable Power Generation Projects.

Resolution 714 provides that the Impuesto País will not be applicable with respect to the import of assets for renewable power generation projects that either (a) have an import financing facility or (b) do not have an import financing facility in place but submit a request before the customs authority.

Furthermore, the tax break will only be applicable to the projects set forth in Annex I thereto.

Finally, Resolution 741 will be applicable to the extent that the relevant assets are not subject to other tax relief (in which case, the latter shall apply).

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Rocío Valdez and/or Victoria Barrueco.

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Federal Mining Secretariat launches the "Federal Program for the Systematic Disclosure of Mining Activities (ProNDSAM)"

On 08/07/23, Resolution 96/2023 (the "Resolution") was published in the Official Gazette, by which the FMS sets -within its authority- the "Federal Program for the Systematic Disclosure of Mining Activities (ProNDSAM)"..

ProNDSAM has five objectives:

1. Prioritize the systematic dissemination processes of mining information.

2. Regulate the operation of the Argentine Mining Information System Open to the Community ("SIACAM"), while ensuring its continuous operation.

3. Promote compliance with international standards for the dissemination of information on the mining sector.

4. Standardize the monthly and weekly publication of reports and the updating of the project portfolio, containing information on exports, employment, international prices, and the development of mining projects.

5. Establish the methodology for the handling and disclosing of information on employment, international trade, and the evolution of mining projects.

According to the Resolution, Section 3, the Transparency and Mining Information Directorate will be in charge of:

(a) Ensuring the continuous updating of SIACAM indicators, reports and open data;

(b) Publishing monthly reports on mining exports, the trade balance of the main mining projects and the provincial origin of mining exports, in accordance with the methodology set out in Annex I to the Resolution;

(c) Publishing monthly reports on mining employment and employment by province in SIACAM, applying the methodology applying the methodology set out in Annex II to the Resolution;

(d) Publishing monthly reports on international prices of the most relevant minerals in SIACAM;

(e) Publishing special reports in SIACAM that deepen the analysis of specific aspects of the mining sector;

f) Publishing the portfolio of mining projects in Argentina produced by the National Directorate for the Promotion and Mining Economy, applying the methodology for determining the state of evolution of mining projects approved by the Federal Mining Council (COFEMIN), applying the methodology of Annex III of the Resolution; and

g) All those functions entrusted to it by the FMS.

Likewise, the Resolution empowers the Transparency and Mining Information Directorate to issue the complementary regulations that are necessary to carry out the corresponding actions for the implementation, execution and control of ProNDSAM.

The Resolution indicates that the expenditure demanded by the measure will be met according to the budgetary availability, for the Fiscal Year 2023, under Program 32 – "Formulation and Execution of the Geological-Mining Policy".

Background information

The Resolution is the result of several measures taken by the FMS in terms of transparency. Particularly, the Resolution contemplates:

(a) Decree 50/2019: established the goals of the FMS, among which is observed to assist the Ministry of Economy in "... the design and implementation of mining policies, in terms of interaction with investors and companies in the sector, and in all actions aimed at promoting the development of mining in the country".

(b) Resolution 47/2020: established the strategic objectives for the "Argentine Mining Development Strategic Plan" for the next 30 years. Among those, it is noted to favor the access to information related to the activity and the National Mining Policy, guaranteeing the transparent management of the sector.

(c) EITI Initiative: Argentina has been part of the EITI since 2019. According to the 2022 Progress Report, issued in April 2023, Argentina received a score of 73/100. Within the EITI Argentina portal, the objective of facilitating access to information and transparency of the extractive sector is observed.

(d) Resolution 89/2022: created SIACAM, which must periodically report on the economic, geological, geographic, social, health and environmental aspects of the mining activity.

(e) Administrative Decision No. 449/2023: delegated to Transparency and Mining Information Directorate the responsibility of assisting the Undersecretariat of Mining Development in the creation, consolidation and administration of the Single National Mining Information System, the Mining Transparency System and the Mining Communication System, referring to environmental, economic, social, legal aspects, geological, cadastral mining projects and their territorial environments.

Prior to the Resolution, the FMS provided reports and studies on mining, without establishing the methodology used for such publications. Previously, the FMS, through its website, published:

(i) Weekly reports: they monitor the latest developments in Argentine mining projects and the evolution of international prices of the main commodities linked to the sector.

(ii) Monthly reports: reports on international prices, mining exports, and other topics.

(iii) Archive of studies: repository of documents made between 2016 - 2018.

(iv) Mining Development Studies Series: reports focused on mining sector research from various angles. The objective of these is to contribute information and perspectives to the debates around mining in Argentina and the world.

(v) Series of studies on mining markets: documents that provide specific analyses linked to the different minerals of interest and the geological potential of Argentina.

(vi) Bilateral mineral trade reports: reports focused on the investigation of mineral trade between Argentina and different countries.

(vii) Catalogues of mining projects: portfolios aimed at investors. They collect information on the projects with the greatest export potential.

(viii) Series of statistical studies: documents and reports on different variables.

(ix) Gender indicators: Reports and studies on indicators on gender equity and existing gaps in the mining sector.

 

For more information or inquiries on these topics, please contact Marcos Moreno Hueyo and/or Dolores Reyes.

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